Insurance Returns: 1120L Returns

The IRS Form 1120-L, the US Life Insurance Company Income Tax Return, is used to report the income, gains, losses, deductions, and credits, and to figure the income tax liability of life insurance companies. Every domestic life insurance company, as well as every foreign corporation that would qualify as a life insurance company if it were a US corporation, must file a Form 1120-L. Insurance companies other than life insurance companies should file Form 1120-PC, the US Property and Casualty Insurance Company Income Tax Return.

Insurance Company A corporation is an insurance company if more than half of its business during the tax year is from the issuance of insurance or annuity contracts, or the reinsuring of risks underwritten by insurance companies.

Life Insurance Company A life insurance company is an insurance company in the business of issuing life insurance and annuity contracts, either separately or combined with health and accident insurance, or noncancellable contracts of health and accident insurance that meet the reserves test in Section 816(a). Guaranteed renewable life, health, and accident insurance that a corporation cannot cancel but reserves the right to adjust premium rates by classes, according to experience under the kind of policy involved, is treated as noncancellable.

Life Insurance Reserves Test

The reserves test requires life insurance reserves, as defined in Section 816(b), plus unearned premiums and unpaid losses (whether or not ascertained) on noncancellable life, health, or accident policies not included in life insurance reserves must make up more than 50% of total reserves as defined in Section 816(c). When determining whether the reserves test has been met:

Life insurance reserves and total reserves must each be reduced by an amount equal to the mean of the aggregates at the beginning and end of the tax year, of the policy loans outstanding with respect to contracts for which life insurance reserves are maintained.
Amounts set aside and held at interest to satisfy obligations under contracts that do not contain permanent guarantees with respect to life, accident, or health contingencies must not be included in either life insurance reserves (Section 816(c)(1)) or other reserves required by law (Section 816(c)(3)).
Deficiency reserves must not be included in either life insurance reserves or total reserves.

Failed Life

See Insurance Returns: 1120L: Failed Life for more information.

1120L Unique Items

See Insurance Return: 1120L: Unique Items for more information.

1120/oit_1120l_1.htm/TY2021

Last Modified: 03/20/2020

Last System Build: 01/31/2023